The Editor's Desk - Thur 18 Dec 2025: What Tshwane’s audit really reveals — and my 2025 sign-off

Tshwane’s numbers tell a very different story — and I share one from my past I’ve never told before.PS. You can book tickets for the inaugural NdB Liberty Indaba by clicking here. And you can book tickets for the post BNC#8 golf day sponsored by Shyft, by clicking here..Don't miss out on future episodes of The Editor's Desk. Subscribe to BizNews Premium and get the podcast delivered to your inbox daily..Listen here.Read the full transcript of The Editor's Desk podcast below.Hello and welcome, I’m Alec Hogg.You’ve read the headlines on BizNews.com, watched the interviews on BizNews TV and caught up with BizNews Radio. So now let’s talk about what the latest developments mean for your money. This is the Editor’s Desk — exclusive analysis for BizNews Premium members. It’s Monday, 15 December 2025.Well, this morning Mr Price Group finally broke a very harsh couple of days on the JSE. The share price dropped sharply after news broke of a proposed R9.6bn acquisition in Germany. The stock is a little firmer today at R181 — up about 1.25% — but still well off the R211 it traded at before the announcement. That’s a drop of more than R20 a share, with the biggest knock delivered on day one.I’m not convinced the recovery will last. Yet another respected asset manager has joined the chorus urging Mr Price to abandon the deal. That story is on BizNews this morning. This time it’s Adrian Clayton of Northstar Asset Management, whose open letter to the board highlights the vast gap between the two businesses. Mr Price operates at a profit margin of roughly 9.5%; the German retailer NKD sits below 2%. Mr Price’s revenue has compounded at 11.5% over the past six years; NKD at just 3%. The chasm is obvious.He also notes that the group’s historically stable price-to-earnings ratio of 15–16 times has collapsed to just over 11 — something he sees as needless destruction of shareholder wealth. Like 361’s Cy Jacobs before him, Clayton is calling for Mr Price to reassess its incentives, re-examine its executive reward structures, and rethink whether this deal serves shareholders or management.It all comes back to incentives. Warren Buffett has long warned that when incentives are misaligned, businesses suffer. Too often remuneration committees — handpicked by executives — reward management more generously than is justified. Buffett famously said companies need Dobermans on the Remco, not Cocker Spaniels. Executive pay has exploded in recent decades, not only in the US but here in South Africa too.If executives want to pursue aggressive offshore acquisitions, that’s their prerogative — but their incentives should be tied to the success or failure of the deal. They already benefit disproportionately when things go well because they deploy shareholder capital. But what happens if it fails? Where is the clawback? Where is the downside for management? This is at the heart of the criticism now coming from Piet Viljoen, Cy Jacobs, and Adrian Clayton.That theme of incentives followed me into the weekend. Jeanette and I visited Rivergate Farm outside Stanford — a charming village east of Hermanus with fascinating history dating back 150 years. Rivergate is owned by entrepreneurs Sandra and Vaughan Cumming, who sold their family printing business in KwaZulu-Natal and reinvested their capital into farming and hospitality in the Western Cape. Their investment has created significant value for the region — from egg production to a now-thriving annual Christmas market.Watching thousands of people stream into this beautifully organised rural market reminded me how entrepreneurs lift communities when they believe their capital is safe. Politicians often fail to grasp this simple truth: investment flows to places that feel secure, predictable and free from the risk of arbitrary expropriation.That’s why Ayn Rand’s Atlas Shrugged came to mind — and particularly the story of John Galt. When the productive class is punished for its sacrifices, it eventually walks away. Remarkably, a real-life libertarian experiment echoing Rand’s ideas is now playing out in the Caribbean. A wealthy Bitcoin investor, Olivier Janssens, has created a privately run community called Prospera on a Honduran island, attracting over $150 million in investment and thousands of jobs. The Financial Times has an excellent piece on it today.We’re seeing similar ideological struggles in Argentina, where Javier Milei is dismantling a century of socialism, and now in Chile, which has just voted in a Milei-style reformist. Meanwhile, in South Africa, ANC-appointed representatives — not elected MPs — are trying to block Starlink’s rollout unless it complies with BEE ownership requirements.Ask ordinary South Africans whether they want nationwide high-speed internet at half the price, and the answer is obvious. Yet a political elite is resisting it for reasons that benefit only themselves. Elon Musk is prepared to invest $500 million into rural schools — but still, resistance continues.As Serge Belamant of Net1 once told me: “Don’t ever confuse poverty with stupidity.” People know what is going on. Affordable internet empowers them. When voters are informed, the political class loses its ability to “eat.” Perhaps that explains the pushback.These pressures — on Mr Price’s boardroom, on SA’s digital access policy, and on entrepreneurs choosing where to invest — all come back to incentives. When incentives are misaligned, value is destroyed. When they’re aligned, societies flourish.On Wednesday we meet for our monthly portfolio review. If you’re invested in our Riccardo or Shift portfolios, please join me at noon. We’ll be making some changes.I’ll leave it there for today. Enjoy tomorrow’s Day of Reconciliation, and look out for links to our freshest content in your Premium newsletter. Thanks for trusting us with your time.I’m Alec Hogg. Until Wednesday, cheerio.

The Editor's Desk - Thur 18 Dec 2025: What Tshwane’s audit really reveals — and my 2025 sign-off

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